Topic: How To Invest

Pat: What’s your current opinion on Canadian Oil Sands Trust?

Article Excerpt

Canadian Oil Sands Trust, $31.24, symbol COS.UN on Toronto (Units outstanding: 484.0 million: Market cap: $15.1 billion), has a 36.74% interest in Syncrude Canada Ltd. Canadian Oil Sands’ share of Syncrude’s current oil production is about 103,100 barrels per day. Syncrude is the largest producing oil-sands project in the world, and Canadian Oil Sands Trust is Syncrude’s biggest stakeholder. Other partners in the Syncrude Canada venture include Imperial Oil (25%); Suncor Energy (12%); ConocoPhillips (9.03%); Nexen Oil Sands Partnership (7.23%); Mocal Energy (5%); and Murphy Oil (5%). ConocoPhillips recently agreed to sell its 9.03% stake in Syncrude to China’s Sinopec for $4.65 billion U.S. Based on that price, Canadian Oil Sands’ 36.74% interest in Syncrude is potentially worth $18.9 billion U.S. That’s 28.6% more than the trust’s current market cap. The sale should close in the third quarter of 2010. Oil sands are a naturally occurring mixture of thick, heavy oil, water and sand. Syncrude mines oil sands and operates power-generation plants,…